SPLIT-ROLL PROPERTY TAX:
Attorney General Unveils Biased Title and Summary of Tax Measure, Clearing Way for Proponents to Gather Signatures

California Attorney General Xavier Becerra released his office’s official title and summary for the latest split-roll initiative October 17, clearing the way for proponents to begin collecting signatures. Like the version that already qualified for the November 2020 ballot, the initiative seeks to increase property taxes by approximately $12 billion per year by requiring frequent market-value reassessment of business properties (with minor exemptions), but the attorney general did not describe the measure as a tax increase.

Proponents announced October 23 that they have begun gathering signatures for the measure, which they hope to qualify as a replacement for the prior version. Proponents and financial backers, including the California Teachers Association and the Service Employees International Union, have until April 14 to submit at least 997,139 valid signatures of California voters. If they are not successful, it is likely they will leave the original version on the ballot, despite their acknowledgement that it contains major flaws.

The attorney general’s description of the new version:

“INCREASES FUNDING FOR PUBLIC SCHOOLS, COMMUNITY COLLEGES, AND LOCAL GOVERNMENT SERVICES BY CHANGING TAX ASSESSMENT OF COMMERCIAL AND INDUSTRIAL PROPERTY. INITIATIVE CONSTITUTIONAL AMENDMENT. Increases funding for K-12 public schools, community colleges, and local governments by requiring that commercial and industrial real property be taxed based on current market value. Exempts from this change: residential properties; agricultural properties; and owners of commercial and industrial properties with combined value of $3 million or less. Increased education funding will supplement existing school funding guarantees. Exempts small businesses from personal property tax; for other businesses, exempts $500,000 worth of personal property. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: Net increase in annual property tax revenues of $7.5 billion to $12 billion in most years, depending on the strength of real estate markets. After backfilling state income tax losses related to the measure and paying for county administrative costs, the remaining $6.5 billion to $11.5 billion would be allocated to schools (40 percent) and other local governments (60 percent). (19-0008.)”

The title and summary caught the attention of the Southern California News Group’s editorial board, which called Becerra’s work “the most disreputable ballot description we’ve seen.” In an editorial published in the group’s 11 newspapers, the board wrote: “The ‘split roll’ initiative, which would split commercial properties away from Proposition 13’s property-tax protections, is a tax increase. No reasonable observer could come to another conclusion. Yet Becerra’s official title doesn’t mention that point. … It reads as if backers wrote it themselves, which isn’t surprising given Becerra’s close connection with public-sector unions.”

The editorial board of the San Diego Union-Tribune wrote: “Becerra should be ashamed – and his office should be stripped of ballot summary duties in perpetuity. … One of the biggest state tax hikes in history shouldn’t be downplayed as a tax ‘change.’”

San Francisco Chronicle editorial page editor John Diaz wrote: “It’s a tax increase for corporations and businesses, plain and simple. Yet Becerra’s office glosses over that to emphasize that it ‘increases funding for public schools, community colleges and local government services by changing tax assessment of commercial and industrial property.’ Changing? Now there’s a nice euphemism for a tax increase. … Voters should not accept these insults to their intelligence and independence.”

While the initiative is substantially similar to the original version, Becerra’s description of the first measure was dramatically different. The title for that version began with the phrase, “Requires certain commercial and industrial real property to be taxed based on fair-market value.”

The title and summary appear on the top of the petitions being circulated. If the measure qualifies, the same title and summary could be used on the ballot and associated election materials. However, Californians to Stop Higher Property Taxes (CSHPT), the campaign opposing the initiative, indicated it will seek a court order for an accurate, unbiased description should the state attempt to use the biased description on the ballot.

“State law says the title and summary must state ‘the chief purposes and points of the proposed measure’ – in this case, a large property tax increase,” CalTax President Robert Gutierrez, who co-chairs CSHPT, said. “We hope the state will use a fair description, rather than proponents’ talking points, if the measure reaches the ballot. Our campaign will make sure voters are fully informed that this measure is an attack on Proposition 13, and would lead to higher consumer prices and lost jobs.”

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